Will the construction of affordable housing enter the fast lane, will it affect housing prices? Experts suggest that the central government invest 1 trillion yuan every year

2024 is destined to be another year of accelerated construction of affordable housing. Not long ago, after the economic work conference and the Ministry of Housing and Urban-Rural Development emphasized the need to accelerate the construction of the "three major projects" such as affordable housing, it can be said that a clear path for a new round of affordable housing construction has been laid.

The original intention of the official construction is that the proportion of affordable housing in the housing supply is low, which cannot meet the demand, and there are obvious shortcomings. Especially in first- and second-tier cities, housing prices are high, and many wage earners cannot afford commercial housing. But it will definitely not copy foreign models, it can be used for reference, and it is definitely not copied.

For the construction of affordable housing, real estate expert Meng Xiaosu is a typical supporter, although many of his real estate suggestions can not be understood by the people, but the view of affordable housing is still very down-to-earth.

Meng Xiaosu said that it is necessary to make affordable housing cover about 50% of families in big cities in the mainland, that is, ordinary families with wage income. If we can increase the construction of affordable housing, we can make the dual-track system operate normally, and we can also solve the problem of whether housing prices can be reduced, which young families and new citizen families are most worried about.

Most importantly, he suggested that after affordable housing is purchased and held by low-income families, it should be able to merge with commercial housing in the future, and after five or ten years, it can enter the market for circulation and trading under certain conditions. Then affordable housing may double the wealth of low-income families in the future. It's really nice to say, whether it can really be like this or let the people understand it themselves.

As for whether the construction of affordable housing will affect housing prices, I have the impression that Meng Xiaosu said that it will not affect housing prices, and I remember that he said that increasing the construction of affordable housing can significantly reduce housing prices. Isn't this a contradiction? I went out of my way to dig into it again today, and what he said was not a contradiction, but it turned out to be a play on words.

As for not affecting housing prices, he said that low-income groups should rely on affordable housing to solve the housing problem, but it is not that the construction of affordable housing will cause the price of commercial housing to fall, that is nonsense.

As for the possibility of lowering housing prices, he said this, because affordable housing does not charge land transfer fees, and the housing prices of affordable housing in big cities are generally one-third of the price of commercial housing.

I finally understood that it was a word game, and it was originally to maintain high housing prices, but in any case, it would be okay if more people could enjoy low-cost affordable housing. But in fact, how many people can live in affordable housing?

By the end of 2022, the supply of affordable housing in mainland China was about 30.83 million units, accounting for about 5% of the country's total housing stock. There are 44.9 million households with a per capita housing area of less than 16 square meters in the country, and if priority is given to the groups with a per capita housing area of less than 16 square meters in the country, affordable housing will face a gap of about 14.07 million units, and the overall supply will exceed demand.

In the face of the shortage of affordable housing, the commercial housing market is also facing a huge challenge, that is, the supply exceeds demand. As of September 2023, the cumulative area of commercial housing inventory for sale has reached 645 million square meters, plus 1.2 billion square meters of newly started but unfinished properties under construction, a total of 1.845 billion square meters of commercial housing will become the stock of commercial housing for sale.

Recently, Lin Caiyi, vice president of the China Chief Economist Forum Research Institute, said that the oversupply of the commercial housing market will be a very serious problem in a certain period of time. The more serious situation is that a large amount of affordable housing expenditure is an important reason for the high (exacerbated) local government debt.

If incremental resources are invested in rebuilding affordable housing, it will squeeze the sales of the commercial housing market, and the already sluggish market will become even worse, and even lead to more serious problems. It will also affect the liquidity of transactions in the second-hand housing market in urban areas, what does it mean? Lin Caiyi believes that this will inhibit the demand for improvement, and everyone will not improve. The implementation of affordable housing at the local level will undoubtedly make local finances worse.

I think there is no need to worry too much, first of all, the transformation of commercial housing into affordable housing can digest a certain amount of inventory, and the construction of affordable housing can also drive the stabilization and recovery of the upstream and downstream industrial chain of real estate. Unable to afford a house is a very real problem, so we should combine everyone's needs and purchasing power to do a good job in gradient construction to meet different levels of housing needs, which is the last word.

However, Meng Xiaosu does not recommend acquiring the backlog of commercial housing and turning it into affordable housing. It is still necessary to start the construction of affordable housing and speed up the construction of affordable housing. Therefore, if the construction of affordable housing will squeeze the market sales of commercial housing, then how to solve it?

Lin Caiyi did not give advice, but Meng Xiaosu suggested that it is relatively easy for the central government to provide 1 trillion yuan, and then ask local governments to support 1 trillion yuan, which is 2 trillion yuan. Together with banks, trusts, and funds, it can grow to 5 trillion. 5 trillion yuan does not collect land transfer fees, and investing it is equivalent to 10 trillion yuan. It will strongly stimulate the construction industry, building materials industry and related industries.

It's okay for the state to pay for low-income groups to build affordable housing, but what Meng Xiaosu means is that you don't need to restrict the commercial housing market, and suppressing the housing prices of commercial housing makes high-income groups dissatisfied, and low-income groups don't get benefits, which is really unflattering. Do you all agree?